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Pennsylvania American Water's Rate Case Approved
Date:11/29/2007

HERSHEY, Pa., Nov. 29 /PRNewswire/ -- Today, the Pennsylvania Public Utility Commission (PUC) approved a settlement of Pennsylvania American Water's rate case.

The settlement, which was reached among the company and the PUC's Office of Trial Staff, the Office of Consumer Advocate, Office of Small Business Advocate and other parties, calls for an overall increase of $36 million per year, or an 8.9 percent increase. This includes a portion of a surcharge that customers have already been paying related to the Distribution System Improvement Charge (DSIC). When factoring in the higher level of DSIC that customers are currently paying, the effective overall increase of the settlement is 6.5 percent. This is the first increase the company has received in base rates since 2004.

"Delivering quality water service requires continued investment to replace aging infrastructure and make the necessary system upgrades to meet drinking water standards," said Kathy Pape, president, Pennsylvania American Water. "It has been four years since we have had a change in our base rates, and we have invested nearly a half billion dollars in that time frame. With the Commission's decision today, we will be able to recover costs related to those investments."

The need for a rate change was driven primarily by the $490 million the company has invested in its treatment and distribution facilities from January 2004 through the end of 2007 to assure the delivery of high-quality water service.

Examples of projects completed across the state during that time frame include:
-- replacing more than 260 miles of pipeline

-- building new storage facilities to ensure reliability of service

-- constructing improvements to our treatment plants

-- installing pump stations to improve water pressure

-- replacing two treatment plants with one facility

-- enhancing municipal fire service by installing new or replacement

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SOURCE Pennsylvania American Water
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